St. Louis County Board settles lawsuit over former Kozy Bar in downtown Duluth

DULUTH – The St. Louis County Board voted unanimously Tuesday to approve a settlement with two former owners of the Pastoret Terrace and Paul Robeson Ballroom property, ending the county's involvement in ongoing legal battles over the fate of the damaged buildings downtown.

The county will pay up to $190,000 to Paul King and Eric Ringsred, who filed a lawsuit in 2017 arguing that the county violated state statute when it sold the property to the Duluth Economic Development Authority (DEDA) for less than market value.

"This is awfully tough to swallow," Commissioner Keith Nelson said at Tuesday's board meeting, after a closed session where the board discussed the litigation.

Separate litigation launched by Ringsred and a preservationist group remains ongoing. That lawsuit, filed in 2018 against DEDA and the city of Duluth, will determine whether officials can demolish the property despite its historic status. The city last week appealed a district judge's order directing it to start repair work on the buildings, which were deemed unfit for habitation after a fire in 2010 and recently sustained more damage in a November fire.

St. Louis County's Tuesday agenda said the county "denies any wrongdoing, and denies that the plaintiffs are entitled to any relief."

"St. Louis County is entering into the settlement agreement solely to avoid the burden and expense associated with further litigation," the document said.

King owned the buildings, home to the former Kozy Bar, until Ringsred purchased them on contract for deed in 2006. Ringsred lost the property through tax forfeiture in 2015, when King still had partial claim to it.

Their lawsuit argued that the former owners were not given a fair chance to repurchase the property because the county did not properly follow the state's procedure for seizing and selling it.

The County Board agenda said the settlement will require that a portion of the payout be spent on "outstanding taxes, assessments, penalties, interest, and costs assessed against" the St. Regis Apartments, another Duluth property owned by Ringsred's business. The city of Duluth deemed the St. Regis uninhabitable for human use last fall, but an attorney for Ringsred said Tuesday that he is working to fix the building's heat so tenants can return.

"We saw a chance to maybe try to address two problems in one deal," Assistant St. Louis County Attorney Nick Campanario said. "This lawsuit is the last thing tying us to the property."

Katie Galioto • 612-673-4478